The current climate is gravitating toward pushing captives—including single-parent captives, association captives and agent-owned captives—to appointing experienced, independent directors to their boards.

Regulators (including the National Association of Insurance Commissioners and Bermuda Monetary Authority) and ratings organizations (A.M. Best, Standard & Poor's) have come out in favor of the movement toward the appointment of independent directors. They believe independent directors add value by providing experienced guidance to captive owners that is separate and distinct from a captive's other advisors, such as managers, lawyers and accountants.

Independents do not have conflicts of interest; they often present a wealth of experience different from others on the captive's board; and they typically possess a broad captive-insurance perspective that is rarely matched. When working with other directors that have complementary expertise, an independent director can present a valuable perspective from which most captives would benefit.